It’s a big night for the coal industry, with the opening of a $30 billion mine and new coal mines on the way in Queensland and the West Australian states.
But it’s also a big day for the industry’s critics.
They are accusing the industry of using the price shock to prop up prices by manipulating supply, a charge the industry denies.
The new mining deals mean coal producers will have to buy new, older, more expensive coal to meet demand.
It means that the industry is being forced to find a way to deal with the price hike.
And it’s a gamble that could have the effect of stifling demand, increasing coal prices, slowing the economy and increasing carbon emissions.
There is no shortage of issues facing the industry.
Its struggling to get its new mines built in Queensland, despite a recent boom in the industry and a promise from the state government to make them more environmentally friendly.
Even as it tries to get those mines up and running, the industry has been forced to fight a series of court cases over the past few years, including a challenge to the coal tax that it has been trying to avoid.
As well as the costs and the emissions associated with the new mines, there are also a range of issues around the way the industry operates, such as the ability of workers to access overtime.
Coal’s share price has fallen by more than 20 per cent in the past year, and its share of the market has dropped to less than 5 per cent.
Some of the companies making the biggest bets on the market are struggling to keep up.
AAP/ABC News: John Brown and his wife were on their way home from work last week when they were hit by a car and seriously injured.
On Friday, coal mining giant Peabody Energy announced it was cutting 400 jobs across Australia, including 300 workers at the Liddell mine in Victoria.
Last month, coal miner BHP Billiton announced it would cut another 300 jobs.
Other companies also have made the move.
Queensland Resources said it was slashing 400 jobs at its Liddelle mine.
Energy and Resources Minister Paul Fletcher said the company’s decision to cut jobs was in the best interests of its workers and that it was taking the “appropriate action to address the issues”.
The industry is also facing pressure from Labor.
In September, Mr Fletcher announced his government would stop the mining tax, saying the mining industry’s problems were a “public health issue”.
He also said the Labor government would bring forward a package of changes to the industry that would “support the industry by ensuring it meets its obligations to protect the environment and meet its obligations under the law”.
Opposition Leader Luke Foley said the government was acting like “the Chinese”.
“We have got to make sure that the coal sector continues to be the largest contributor to the Australian economy and the largest employer in our state,” he said.
But some of the industry leaders who have been critical of the coal prices are also backing the mining companies move to cut wages.
Tony Hancock, who heads the National Coal Council, said the coal price had been too high for the company to survive.
“The cost of production, in terms of carbon dioxide, is about the same as it was before the price crash,” he told ABC Radio’s AM program.
He said the industry was being forced by market forces to cut costs to boost profits.
Mr Hancock said the price increase was a direct result of the government’s carbon pricing policy, which has made it more expensive to burn coal.
Labor has also criticised the coal mining tax.
This is a political game.
Labor is not prepared to take on the fossil fuel industry in the same way that they did in the 1990s when they introduced the carbon tax and the cost of coal was so high.
Now it’s being used to fund the Liberal Government’s environmental policy, and to support its anti-coal policy, so that they can continue to support the mining sector.
Opponents of the tax have also said it will lead to job losses and could cause an economic downturn.
Liberal Senator Dean Smith said the proposed carbon price was a bad policy, but he believed the industry would survive the price change.
What’s the plan?
The Coalition’s energy policy was to roll back the carbon price, which was introduced in the 2017 budget, and replace it with a cap-and-trade system.
Under the cap- and-trade scheme, the price of a tonne of carbon would be reduced by 40 per cent, or $1.50, whichever was lower.
Then the price would be returned to $1 per tonne.
Cap-and and-trans are designed to encourage a price increase and protect the climate.
However, it is the industry who would pay the price.